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Corporate Governance

The basis of the IDEC Group’s corporate governance is to ensure management transparency and efficiency for shareholders and other stakeholders. For this reason, we assign outside directors and separate the management supervisory function from the execution function so as to always maintain a high priority on transparency and efficiency. Under this concept, in order to realize the improvement of corporate value based on “The IDEC Way”, which was established in 2019 as a new philosophy toward becoming a truly global company, the IDEC Corporate Governance Policy has been established and published to further strengthen corporate governance.

Corporate Governance Policy

Report on Corporate Governance

■ Corporate Governance Report (Last update: June 26, 2024)

Corporate Governance System

■ Policy and procedure for director appointment and dismissal 

The process of selecting candidates for directorships is based on a skills matrix outlining the expected skills and other requirements. The Nominating Committee recommends candidates to the Board of Directors on the basis of the skills matrix review, and the nominations are made part of the agenda of the General Meeting of Shareholders through voting at a Board of Directors meeting attended by a majority of independent outside directors. Directors who are deemed to no longer possess the expected skills and qualities of their position are considered for dismissal. Also, if a director is found to have violated laws, regulations, the articles of incorporation, or otherwise be unfit for the discharge of their duties, the Board of Directors, acting on a report by the Nominating Committee, votes on whether to include a proposal for the director’s dismissal in the General Meeting of Shareholders agenda. This vote must be made at a meeting attended by a majority of independent outside directors.

Directors & Executive Officers

Evolution of governance

The IDEC Group has separated the business executive function and the supervisory function of the management in order to realize efficient corporate management, and has proactively appointed outside directors since early on.
In 2016, the IDEC Corporate Governance Policy was established to set forth and communicate our views on governance and our operating policy.
In June 2018, we transformed into a Company with an Audit & Supervisory Committee. We established a voluntary Nominating Committee in 2021, and a Remuneration Committee in 2022. We have ensured that outside directors constitute the majority of all directors since 2016.

Today, the Board of Directors is a diverse body made up of men and women with different backgrounds and areas of expertise.

Internal Control System

In order to ensure the credibility of the financial reporting of the IDEC Group, we have prepared relevant regulations and have established appropriate systems in accordance with the internal control evaluation criteria for financial reporting. The Internal Control Policy on Financial Reporting is established to clarify the overall Group’s promotion structure, and to establish a framework for continuous self-inspection at each division and group company and for independent monitoring by the Internal Auditing Department.

The Voluntary Nominating Committee and Succession Planning

We established a voluntary Nominating Committee in 2021 as an advisory body to the Board of Directors for objective, independent decision-making on director nominations and plans for developing next-generation executive candidates. The committee is made up of a majority of outside directors and frankly communicates its objective opinions on candidate selection and training to the management.
Our succession planning program seeks to continually cultivate talent who can help lead our sustainable growth worldwide. Candidates for representative director and other executive positions are provided with general management training tailored to their future duties, and with opportunities to participate in important meetings, including the Top Management Meeting and the Executive Officers’ Meeting.
The Nominating Committee receives reports on the progress of development of candidates, and expresses opinions on succession planning to the Board of Directors.

Succession Planning

The voluntary Nominating Committee established in 2021 discussed the selection of next-generation executive candidates and how to train them, and then developed and launched a succession plan for cultivating tomorrow’s executive leadership.
In its second year, FY2023, the committee carried out a training program for people selected as next-generation executive candidates. The training included activities such as external seminars, one-on-one action learning sessions with outside directors, and lectures on specialized topics. The candidates were also given opportunities to attend sessions of the Top Management Meeting and the Board of Directors’ Meeting to directly experience actual management issues and come into close contact with executive officers and directors.
In its third meeting of FY2023, the committee discussed and reported the selection of director candidates for the next fiscal year from among the next-generation executive candidates.

The Voluntary Remuneration Committee

As was indicated by the results of the survey on the effectiveness of the Board of Directors and by other observations, there were issues in the design of our system of remuneration for directors, and a need to establish a Remuneration Committee. We launched a voluntary Remuneration Committee with a majority of outside directors on October 1, 2022 as a body for reviewing and deliberating on the director remuneration system.

Since then, the committee has been examining remuneration system proposals. Through this committee, we are working to increase objectivity and transparency in not only next-generation executive training and selection, but also the remuneration decision-making process.
In FY2023, the committee reviewed and discussed our officer remuneration system with the input of outside experts. Using the insights gained, the committee developed a new grand design for remuneration.

Remuneration Policy for Directors

Proactive Engagement by Outside Directors

Outside directors play a professional and independent role in various ways. At the Board of Directors, they express candid opinions based on their high level of expertise and management experience, and participate in the discussion from an independent standpoint. They are also actively involved in the growth of the Company’s business, including the holding of individual sessions with a responsible department or departments concerning a business issue or subject, and lectures and interviews in the curriculum for next-generation training.
With the objective of enhancing communication among outside directors’ exchange session have been held since FY2019. In FY2022, outside directors deepened examination of medium- to long-term strategic policies of the IDEC Group through active discussions and exchange of views.

Outside Director Activities


Efforts to Evaluate Effectiveness

In order to improve the effectiveness of the Board of Directors, an evaluation of all directors except the CEO has been conducted using a questionnaire method every year since FY2016. Since FY2022, a third-party organization has conducted the questionnaire survey and analyzed the responses.
The results of their evaluation are reported to the Board of Directors, whose members share the issues identified and continuously strive to make improvements. The FY2023 evaluation found that the board’s effectiveness had improved over the previous year with respect to discussion of the business portfolio, director involvement in remuneration system design and the successor training plan, and dialogue with shareholders, among other areas.
On the whole, the board was judged to function effectively, but several issues were identified. The following actions are being taken to address the key issues.